You've been feeling apprehensive (perhaps even guilty) because you have failed to report your under the table business income. Maybe you've never filed a tax return, even though you know you owe money. Lastly, you contact an accountant to resolve the situation.
Although it's commendable that you are trying to correct matters, employing an accountant to accomplish these overdue returns could be a big mistake. The reason why is because tax evasion is a criminal offence or felony. You may also be subject to civil action.
Would you employ an accountant to protect you in a criminal proceeding? Not likely. You would be wise to hire a qualified lawyer.
First of all, attorneys have something known as solicitor-client privilege (also known as attorney-client privilege or legal advice privilege). This basically means that things you tell your attorney when seeking legal advice are confidential and can't be used against you. Even written records can be covered by this privilege.
On the other hand, your accountant can be compelled to testify against you and all data in his possession can be demanded by the authorities.
Second, your lawyer can prepare a legally binding agreement that can protect you. In exchange for your coming clean, the tax authorities may agree not to charge you criminally and, in some cases, even reduce penalties or tax liability.
If your accountant tried to do the same thing, they could demand all information about you. Your accountant wouldn't be protected by solicitor-client privilege.
If, say, your accountant filed your tax return from ten years ago in your stead, the tax authorities can nonetheless charge you with tax evasion, despite the fact that you are clearly trying to correct matters (albeit a bit late).
It is even possible that your accountant could get into trouble for failing to report your delinquency. On the other hand, your attorney can't be compelled to testify against you, being guarded by solicitor-client privilege. Your lawyer may also have his own in-house accountant to be able to protect you.
Your lawyer (specializing in criminal and tax law) will likely discuss an agreement with the tax authorities before submitting any tax returns.
Consequently, if there's a good chance you could be charged criminally for your failure to file tax returns or properly report income or expenses, don't see your accountant. Instead, consult an attorney specializing in such matters before you file or amend any returns.
Although it's commendable that you are trying to correct matters, employing an accountant to accomplish these overdue returns could be a big mistake. The reason why is because tax evasion is a criminal offence or felony. You may also be subject to civil action.
Would you employ an accountant to protect you in a criminal proceeding? Not likely. You would be wise to hire a qualified lawyer.
First of all, attorneys have something known as solicitor-client privilege (also known as attorney-client privilege or legal advice privilege). This basically means that things you tell your attorney when seeking legal advice are confidential and can't be used against you. Even written records can be covered by this privilege.
On the other hand, your accountant can be compelled to testify against you and all data in his possession can be demanded by the authorities.
Second, your lawyer can prepare a legally binding agreement that can protect you. In exchange for your coming clean, the tax authorities may agree not to charge you criminally and, in some cases, even reduce penalties or tax liability.
If your accountant tried to do the same thing, they could demand all information about you. Your accountant wouldn't be protected by solicitor-client privilege.
If, say, your accountant filed your tax return from ten years ago in your stead, the tax authorities can nonetheless charge you with tax evasion, despite the fact that you are clearly trying to correct matters (albeit a bit late).
It is even possible that your accountant could get into trouble for failing to report your delinquency. On the other hand, your attorney can't be compelled to testify against you, being guarded by solicitor-client privilege. Your lawyer may also have his own in-house accountant to be able to protect you.
Your lawyer (specializing in criminal and tax law) will likely discuss an agreement with the tax authorities before submitting any tax returns.
Consequently, if there's a good chance you could be charged criminally for your failure to file tax returns or properly report income or expenses, don't see your accountant. Instead, consult an attorney specializing in such matters before you file or amend any returns.
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